Watch Out

As we move into the holiday season further toward celebrating the New Year, Barron's featured an article, "Everything's Going to Go Right," by recalling former Wall Street technician and guru Bob Farrell line about: "When all forecasters and experts agree, something lest is going to happen."

After two huge shocks--one could even say three, with the negative opening of market at the beginning of 2016 caught quite a few off guard--in the election areas, projection for 2017's market sit in a fairly narrow range. Given the market's reaction to the Trump surprise--it was really only a surprise to those who had their craniums buried somewhere the sun never shines--stocks, bond yields and the greenback are all up.

Now the gurus have their 2017 outlook set on the real so-called new normal, investors and things will behave rationally. Sounds to us like a bunch of Harvard-trained econometric model slaves who have predicted seven of the last three predictions. Almost guaranteed to be incorrect. A Republican- controlled Congress will carry out to the letter of Trumpenomics, volatility will remain docile and the inflation that the current set of pathetically incompetent bureaucrats at the Fed searched for but could never find will arrive front, center and still breathing.

The recent interest rate hike will sooth the souls of investors remains to be seen, just as how all the Smoot-Hawley fears will play out. Our reaction is the reaction about protectionism and its potential ugly head rising up is way overdone. Technology often is the excuse given for jobs disappearing as if its all good when it isn't. That technology often brings higher costs not lower prices, fewer choices and actually way poorer services. Save your Luddite comparisons for your converts. Just call up one of your favorite corporations and see if those robot answered menus haven't gotten longer and longer and how their so-called call volume has increased not just during a holiday period or tax season but all year around.

Meanwhile, China faces a capital flight and fake news problems as other markets face similar disturbances and U.S. consumers will be showered with more opportunity to buy and store more imported junk in their garages if they've been able to afford owing one, and the neocons still lurk behind their favorite bushes. Given that and a host of of problems around the globe too numerous and perhaps too boring to mention here, one could say the fix is in. If you like to be hated, try this when  it comes to sectors. Among the Wall Street 2017 forecasters Barron's recently wrote about, nine of  the 10 gurus suggested avoiding consumer staples.

Former President Eisenhower noted probably long before Bob Farrell ever said it: "When everyone is thinking the same thing, nobody is thinking." So the ducks floating on Serenity Lake all seem to be lined up per the guru crowd, a quite amazing result and turn around given the furor that lashed away for nearly the full of  2016 at Trump's coattails. The moral of the story if there is one, if you own a hard hat liner or helmet, it might be prudent to keep it handy, hanging near the favorite door you use to egress and ingress your abode or office.